Combined Heat and Power
for the Ethanol Industry
Luis Troche
CHP Partnership
U.S. Environmental Protection Agency
Governors’ Ethanol Coalition Meeting
March 1, 2005
Overview
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EPA CHP Partnership
CHP basics
CHP for ethanol industry
Experience to date
State opportunities to promote CHP
EPA assistance available
The EPA CHP Partnership
• Voluntary public-private partnership to
foster clean, efficient, cost-effective CHP
– CHP saves fuel and reduces GHG emissions
• Accomplishments
– Working with 166 Partners to date
– Assisted 110 operational CHP projects totaling over
2,200 MW
– Reduced emissions by an estimated 1.5 million metric
tons of carbon equivalent (MMTCE)
Combined Heat and Power
• Combined heat and power (CHP) is the
simultaneous production and utilization of
electrical and thermal energy from one fuel
source
• CHP is a proven strategy for increasing the
efficiency for electric and thermal generation
– 80 GW of existing CHP in U.S.
– Approximately 10% of total U.S. electric generation
• Overarching benefits
– Can be 50% more efficient than separate heat and power
– Can reduce fuel demand and use any fuel or technology
– Can reduce emissions and replace older, high emitting assets
Efficiency Advantages of CHP
CHP for the Ethanol Industry
• Ethanol production has large electric and
steam demands appropriate for CHP
– Typical CHP system would be 2 to 6 MW
– Plants run 24/7 all year long
• Energy is a significant production cost in
ethanol industry
– Energy costs second only to cost of corn in dry
mill ethanol plants
– Grid power cost increasing in many areas
Benefits/Drivers for Ethanol Plant Owners
• Reduce operational and capital expenses
– Lower energy costs
– Offset equipment retrofit or replacement
• Enhance competitive position
– The most cost-effective plants have advantage
• Increase power reliability
– Reduce likelihood and impact of power outages
• Reduce environmental impacts
– Efficiency lowers greenhouse gas emissions
• Opportunity to partner with servicing utilities
• Hedge against unstable energy costs
Benefits to the State
• Improve competitiveness of businesses in your
state
• Improve energy security
– CHP less vulnerable to disruption
– Reduced fuel demand
• Environmental performance
– Increased efficiency reduces greenhouse gases and
pollutants
• Improve power infrastructure
– CHP/DG may support the grid and help delay or
avoid transmissions and distribution upgrades
CHP Options for Ethanol Plants
• Boiler/steam turbine CHP
• Gas turbine CHP
• Integrated VOC destruction
• Technology and fuel flexibility to meet
plant needs
CHP at U.S. Ethanol Plants
• About 77 plants in operation
• Over 40 plants in some stage of development
• 4 plants currently use CHP
– U.S. Energy Partners, LLC, Russell, Kansas
15 MW gas turbine
– Northeast Missouri Grain, LLC, Macon, Missouri –
10 MW gas turbine
– Adkins Energy, LLC, Lena, Illinois –
5 MW gas turbine
– Otter Creek Ethanol, LLC, Ashton, Iowa
7 MW gas turbine
• Significant opportunity exists
U.S. Energy Partners, LLC/ City of
Russell
• 40 million gallons per year
plant in Russell, Kansas
• Two gas turbines – 15 MW electric, 65,000
lbs/hr steam
• Joint project between plant and municipal
utility
• 10 to 20% savings on process steam
Adkins Energy, LLC
• 42.5 million gallons per year
plant in Lena, Illinois
• One gas turbine – 5 MW electric; 26,000
lbs/hr steam
• Supplies 99% of the plant’s electric needs
and 32% of the steam needs
• Simple payback of 3.3 years
Northeast Missouri Grain, LLC/
City of Macon
• 40 million gallons per year
plant in Macon, Missouri
• One gas turbine – 10 MW electric; 51,000 lbs/hr
steam
• Partnership between City of Macon and Northeast
Missouri Grain
• Increased reliability – CHP system maintained
plant operations during four power outages since
April 2003
Challenges and Opportunities
• CHP not normally considered by plant designers
– New developers may use CHP as a competitive
advantage
• Lack of capital
– Third party options/partner with utilities
– State incentives
• Utility practices (interconnection, rate design)
– State policies
• Concern about natural gas/power prices
– Consider alternate fuels (co-firing, coal, biomass)
– In certain areas, electric prices rising with gas
State Policies Can Help
• Establish rules to encourage fair treatment of CHP
– Standard interconnection, rate design
• Adopt emissions limits on an output basis to
encourage efficiency
– Must include thermal output
• Develop CHP incentive programs
• CHP Partnership can assist
– learn what other states are doing
– focus on CHP opportunities in your state
• CHPP working closely with State Partners
– IA, IL, MN, OH, WI, NE, NJ, NY, CT
How Does the CHP Partnership Help?
• Education and Outreach
– Identify and communicate opportunities,
benefits, barriers and solutions to energy
users, developers, state agencies
• Direct project support
– Provide needs assessment, feasibility
analyses, barrier analysis, strategies,
networking for end users
• Recognition and publicity
– ENERGY STAR CHP Awards, press releases,
dedication ceremonies
EPA CHPP Progress in Ethanol Market
Development
• Education and outreach
– Assessed technical and economic potential
– Developed fact sheet and case studies
– Partnered with developers, plant owners, States,
Nebraska Ethanol Board, and Midwest CHP
Applications center (MAC)
– Presented to Governors’ Ethanol Coalition, Fuel
Ethanol Workshop, Iowa, Wisconsin, plant owners
• Project assistance
– Evaluated CHP options for 4 ethanol plants
• Recognized and publicized award-winning plants
– Russell Energy Center, Kansas
EPA CHPP Next Steps
• Work with designers and developers
• Expand direct project assistance to
evaluate CHP at additional plants
• Explore policy opportunities with States
– Output-based emissions limits
– Interconnection and rate design
– Incentive programs
• Recognize and publicize new projects
Conclusions
• CHP is a valuable option for the
ethanol industry
• CHP benefits the consumer, the
state, and the environment
• State agencies can institute policies
and regulations that promote CHP
• The EPA CHPP is ready to help
For More Information
• Luis Troche
Team Leader
EPA Combined Heat and Power Partnership
202-343-9442 phone
202-343-2208 fax
• www.epa.gov/chp
Appendix – Additional
Information on CHP
Boiler/Steam Turbine CHP
Gas Turbine CHP
Gas Turbine/Supplemental Firing CHP
Thermal Oxidizer/Steam Turbine CHP
Environmental Benefits of CHP- NOx
Example